AIM-listed advice group AFH Financial is to raise £6.5 million to fund further IFA acquisitions.

The Bromsgrove-based business has conditionally raised £4.5 million by placing 2.7 million shares with institutional and other investors.

It aims to raise a further £2 million by issuing another 1.2 million shares to new and existing investors at the same price.

The price of the shares is a 12.7% discount to their mid-market price at the close of play on 8 December, when they were 189p per share.

Institutional investors which have bought the shares include the River and Mercantile UK Micro Cap investment trust, run by Philip Rodrigs, and Octopus Investments, which runs a series of venture capital trusts and enterprise investment schemes.

It is the not the first time AFH has tapped investors for money to fund its acquisition strategy.

In August 2013, the firm, which prior to AIM was listed on the Plus50 stock exchange, raised £2.8 million through an equity and bond issue.

In December last year it raised a further £1.9 million through a further bond issue.

The company has completed 11 acquisitions in the last 12 months. It has previously forecast revenues for 2015 will exceed £20 million, compared to £8.2 million last year, and for assets under advice to top £2 billion.

Alan Hudson (pictured), AFH chief executive, said the latest money would allow the firm to continue expanding.

‘We are delighted to raise additional funding of up to £6.5 million from both existing shareholders and new investors to enable AFH to continue to execute upon its growth strategy. We believe our shareholders will see the benefits of our growth strategy in the years to come.’